The Truth About the Deficit

This was written by Karl Denninger. www.Market-Ticker.org.
 
Politicans in the developed world need to find the political will to have the following honest conversation with their citizens: 
 
“We have made promises we cannot keep using money we don’t have. You must choose to either pay much higher taxes to bring what you give to government in line with what you demand government pay out, or what government pays out must be cut to conform to what you pay in. At the same time you must accept that the GDP, and thus standard of living, you have become accustomed to was not in fact possible, as it was not purchased with your labor but rather with ever-increasing promises to pay tomorrow — a mathematical impossibility.
 
There are no other options, because all other forms of attempted manipulation of the facts are nothing more than a geometric series of debt that cannot be sustained on an indefinite basis.
All government deficit spending does is devalue everyone’s standard of living. That is why our standard of living is going down, why real inflation-adjusted household income is declining and why “printing” or “devaluing” or other similar machinations have always and must always fail.
Government deficit spending is in fact nothing other than a tax dishonestly applied across the entire economy — that is, across everyone, rich and poor — that damages the actual available purchasing power of the people.”

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